Don Bright

N

NY_HOOD

Don,
are your traders protected under sipc? as for a deposit,5k is more than enough for a prop given the risk of them going under. 20-1 with 5k is plenty for me as a trader. as for an owner of a prop,you can limit the number od shares a trader can buy. also,a good prop can tell after 2 weeks what kind of trader they have. i know guys who have barely 1k in their accounts and they have 100k buying power;they have been with the firm for 2 years and have a great track record. a firm demanding 20k is not realistic in my book as a retail account with 25k will give you 4-1 with sipc and no games. contrary to what anyone says,you can make a damn good living with 100k buying power if you are a good trader. i had 250k and the most i ever used at one times was 80k.
 
No SPIC insurance at prop firms...reality is, with 5k up, you are 100 times more likley to go under then the prop firm! If losing 5k is that big of a deal to you, then trading is not the right place for you to put your money. I suggest building your stake a bit, and coming in when you have 15k or so, can take some risk and have a little bit of a cushion for the inevitable trading errors/losers.
 
their are no guarantees of course, keep up as little money as possible that all, like most do, take advantage of the leverage, but still do your dd, to feel comfortable with the biz deal.
 
Quote from NY_HOOD:

Don,
are your traders protected under sipc? as for a deposit,5k is more than enough for a prop given the risk of them going under. 20-1 with 5k is plenty for me as a trader. as for an owner of a prop,you can limit the number od shares a trader can buy. also,a good prop can tell after 2 weeks what kind of trader they have. i know guys who have barely 1k in their accounts and they have 100k buying power;they have been with the firm for 2 years and have a great track record. a firm demanding 20k is not realistic in my book as a retail account with 25k will give you 4-1 with sipc and no games. contrary to what anyone says,you can make a damn good living with 100k buying power if you are a good trader. i had 250k and the most i ever used at one times was 80k.
More...

SIPC protection is not nearly enough to make anyone feel safe in my opinion. What we did long ago, is place at minimum $10million of our cash directily into the Class B (traders side) of the LLC (we actually have 10 times that in there, but we have always kept $10Mil minimum). This is 100 times more protection than SIPC if a trader were to lose any of our money. That would mean that a trader would have to lose all their money, a hell of a lot of ours, before any trader could be affected whatsoever. We've been exchange members since 1978 with no concerns.

Feel free to email me to see copies of our balance sheets to prove what I am saying...I think we are the most transparent firm on the Street and believe in full disclosure.

Regarding cash amounts. It takes a $million or more just to do "opening only orders" (low risk, high reward, but takes $$) and with $20K or so, that helps our traders make good money. Then you add Mergers, pairs, etc. it's even better.

And, FWIW, when you sell a stock short where does all the interest from the cash generated end up? In the pockets of your "SIPC protected" retail broker with a lot tighter contract than we have.

Look, trading at this level is not for everyone...but it seems to appeal to a lot of serious traders since over half our people have been with us since before 2000.

There really is not need for argument...different trading models for different people....I have, and always will, push everyone to do due diligence before leaping into any business venture.

All the best,

don
 
Quote from Verick:

(Minor friendly to the above)

IB pays interest on short positions... as per earlier discussion.
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With a minimum balance of $100,000, right?

- Interest Paid on Short Sale Proceeds
Effective December 1, 2006

Currency TierUSD 100,000 4.065% (BM - 1.25%)

http://individuals.interactivebrokers.com/en/accounts/fees/interest.php?ib_entity=llc

I like IB, and we will likely be opening a corporate account there at some point. But interest on short stock sales seems to start at $100K balance, which is better than most retail brokers, IMO.

Don
 
mschey,
losing 5k is'nt the point as far as trading is concerned. its the principle. losing 5k because a firm goes under is alot different than losing 5k in trading in my opinion. i don't care how much you have,5k is 5k and it should not just be taken from you because a prop firm wants to take it.
 
Quote from NY_HOOD:

mschey,
losing 5k is'nt the point as far as trading is concerned. its the principle. losing 5k because a firm goes under is alot different than losing 5k in trading in my opinion. i don't care how much you have,5k is 5k and it should not just be taken from you because a prop firm wants to take it.
More...

I agree, the "goes under" is the reason why you do due diligence...and the same reason we have always instilled confidence in our traders with our committment of money to the trader's side of the LLC. And, just to be perfectly clear, we do not "take it" .. sure, some traders lose money, but why in heck would we "take it"? I can't speak for others in this regard, but come one, it makes no sense for us to do anything but protect our traders money.

One of our biggest battles is protecting traders from themselves, why would we want to jeopardize their money?

All the best,

Don
 
regarding IB, unless I misunderstood their website, you only get paid interest on total amount of your short position exceeding $100K.

Check the examples given on their site. I don't think it matters what the size of your account, if your short position totals $101K, you get paid on a whopping $1K.
 
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